"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter, The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis and Commentary
"Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
"THE ACTION UKRAINE REPORT - AUR" - Number 624
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., WEDNESDAY, DECEMBER 21, 2005
--------INDEX OF ARTICLES--------
1. UKRAINE-MACROECONOMIC SITUATION-NOVEMBER 2005
REPORT AND ANALYSIS: By Olga Pogarska and Edilberto Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group
Kyiv, Ukraine, Wednesday, December 21, 2005
2. 2005 MARKS THE YEAR UKRAINE BEGAN TO GROW UP
EUROPE FEATURES: By Stafan Korshak, Deutsche Presse-Agentur
Kiev, Ukraine, Tuesday, December 20, 2005
3. "HEROES OF THE KUCHMA EPOCH: SOME GOING INTO
PARLIAMENT, SOME INTO THE SCRAP HEAP OF HISTORY"
ANALYSIS AND COMMENTARY: By Leonid Amchuk
Ukrayinska Pravda web site, Kiev, in Ukrainian 16 Dec 05
BBC Monitoring Service, UK, in English, Tue, Dec 20, 2005
4. UKRAINE LEADER YUSHCHENKO DISMISSED GAZPROM
THREATS TO TURN OFF GAS AS 'BLACKMAIL'
AFX Europe (Focus), Kiev, Ukraine, Tue, Dec 20, 2005
5. UKRAINE COULD SEEK INTL ARBITRATION ON RUSSIAN GAS
Associated Press (AP), Kiev, Ukraine, Tue, December 20, 2005
6. GAZPROM'S GLOBAL AMBITIONS
By Tristana Moore, BBC News, United Kingdom, Tue, Dec 20, 2005
7. GAZPROM'S PRICE REGIME GAMBIT
ANALYSIS: By Peter Lavelle, United Press International (UPI)
Moscow, Russia, Tuesday, December 20, 2005
8. PRESIDENT GETS BUDGET IN UKRAINE
By Judy Dempsey, International Herald Tribune (IHT)
Europe, Wednesday, December 21, 2005
9. PRESIDENT VIKTOR YUSHCHENKO APPOINTS OLEG
SHAMSHUR TO BE UKRAINE'S AMBASSADOR TO USA
Ukrinform, Kyiv, Ukraine, Tuesday , December 20, 2005
10. FRENCH BANK BNP PARIBAS SA TO BUY A 51% STAKE IN
UKRAINE'S FIFTH-LARGEST BANK, UKRSIBBANK
Adriana Brasileiro, Dow Jones Newswires, Paris, France, Tu, Dec 20, 2005
11. UKRAINE'S KRIVOROZHSTAL TRADE UNION TO TAKE STRIKE
ACTION OVER FAILURE TO PAY HIGHER WAGES BY MITTAL STEEL
By Grigori Gerenstein, Dow Jones, Kyiv, Ukraine, Tue, Dec 20, 2005
12. JACKSON-VANIK GRADUATION COALITION UPDATE
Legislation to graduate Ukraine from provisions of Jackson-Vanik Amendment
Amb Steven Pifer & Amb William Miller, Co-Chairmen
Jackson-Vanik Graduation Coalition
Washington, D.C., Wednesday, December 21, 2005
13. UKRAINIAN EXCHANGE STUDENT NINA KONDRATENKO TO
EXPERIENCE DIFFERENT HOLIDAY CELEBRATIONS IN MONTANA
Her hometown is Mykolayi, Ukraine, population 500,000
Bill Vander Weele, Sidney Herald, Sidney, Montana, Tue, Dec 20, 2005
14. LVIV: ANOTHER RETURN OF A RIGHTEOUS MAN
100 years ago Andriy Sheptytsky founded a museum that will bear his name
By Iryna YEHOROVA, The Day Weekly Digest in English, #41
Kyiv, Ukraine, Tuesday, December 20, 2005
15. SECRETS OF THE FOREST
The artist Ori Gersht spent last winter videoing this wood in Ukraine.
Why? Adrian Searle discovers the terrible story behind it.
By Adrian Searle, The Guardian, London, UK, Tue, Dec 20, 2005
========================================================
1. UKRAINE - MACROECONOMIC SITUATION - NOVEMBER 2005
REPORT AND ANALYSIS: By Olga Pogarska and Edilberto Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group
Kyiv, Ukraine, Wednesday, December 21, 2005
SUMMARY
[1] In October, Ukrainian economic growth reported a 2.2% year-over-year
(yoy) increase; however, cumulative growth remained unchanged at 2.8% yoy.
[2] In January-September, the consolidated budget registered a surplus of
2% of GDP. Amendments to the 2005 State Budget, adopted in November,
envisage an increase in the fiscal deficit from 1.6% of GDP to 2.3% of GDP.
Considering the fact that the budget is currently in surplus, this will
result in considerable fiscal loosening at the end of the year.
[3] Consumer price inflation continued to decelerate to 12.4% yoy in
October; despite considerable inflationary pressure caused by high fuel
prices, significant capital inflow and social payments, year-end inflation
will be below last year's.
[4]Despite a worsening merchandise trade balance, Ukraine's current
account will be in surplus thanks to a strong external position in trade of
services.
[5] At the beginning of December, the European Commission officially
announced its decision to grant market economy status to Ukraine.
ECONOMIC GROWTH
After sharp deceleration during January-August, primarily caused by a sharp
downturn in both domestic and foreign investments and declining world
demand for metals, cumulative economic growth remained stable at 2.8%
yoy over the next two months. In October, GDP reported a 2.2% yoy
increase, slightly lower than expected considering the relatively low base
period and the 3% yoy at which economic growth rebounded in September.
According to the latest statements from government officials, GDP growth is
expected to reach 3.8% yoy in 2005. This is more than three times lower than
the growth achieved last year. However, even this modest figure may turn out
to be optimistic, given the continuing slowdown in industry and the decline
in domestic trade and construction.
Despite a fairly good harvest this year, value added growth in agriculture
decelerated to 2.3% yoy over January-October, which should be attributed
to a high base effect. Over the period, deceleration in domestic trade and
construction continued. Value added in domestic trade declined by 4.2% yoy
over January-October, the same rate as in the previous period. Contraction
in the sector was mainly due to wholesale trade rather than retail. The
latter, benefiting from the population's growing real income, continued to
increase.
At the same time, deterioration of wholesale trade may be attributed to a
high base effect, de-shadowing of trade and sluggish investment activity.
Value added in the construction sector continued to decelerate over the
period, registering 6.9% yoy, down from 7.2% yoy over January-September.
On the upside, transport (which accounts for about 12% of total value added
and which expanded by 7.3% yoy) became the main contributor to period
GDP growth.
Industrial output continued to decelerate over January-October, reporting
3.1% yoy growth, almost unchanged from the 3.2% yoy reported in the
previous period. During October, industrial output growth accelerated to
2.4% yoy, up from 0.9% yoy in September. The acceleration occurred
thanks to a growth rebound in metallurgy and machine-building. For the
first time since February of this year, metallurgy reported growth-of 2.3%
yoy, which may be attributed to stabilization of world steel prices.
As a result, the cumulative reduction of metallurgical output slowed to 2.4%
yoy. Although machine-building production rebounded to 3.4% yoy in
October (after a drop in production by 2.8% yoy a month before),
cumulatively it continued to decelerate. On the upside, the growth of output
in food processing remained virtually unchanged at a high 14.4% yoy.
Benefiting from high external demand, chemicals demonstrated a healthy
10.2% yoy increase over January-October.
FISCAL POLICY
Although economic growth slowed considerably this year, fiscal budget
performance has so far been successful. According to preliminary data
released by the State Treasury of Ukraine, the consolidated budget surplus
reached UAH 5.8 billion (about $1.15 billion) over January-September, which
is equivalent to 2% of period GDP. Consolidated budget revenues went up
by a nominal 39% yoy to reach UAH 95.1 billion ($18.8 billion), while
expenditures grew by a more moderate 13% yoy to UAH 89.3 billion ($17.7
billion).
A fiscal surplus was achieved thanks to a considerable increase in tax
proceeds and under-fulfillment of expenditures, except social transfers. The
growth of tax revenues may be due to improved tax compliance, as well as
advanced payments of enterprise profit tax and accumulation of VAT refund
arrears.
On November 3rd, the Parliament adopted amendments to the 2005 State
Budget, which were signed by the President a few days later. The state budget
revenues were lowered to UAH 106.1 billion ($21 billion), down by 0.6%, at
the expense of non-tax revenues, while expenditures were increased by only
1.1% to UAH 115.8 billion ($22.9 billion).
In particular, the government decided to allocate an extra UAH 2.8 billion
($554 million) for financing the shortage of pension fund resources and UAH
0.5 billion (about $100 million) as subsidies to local budgets for paying
budget sector employees' wages and utility bills.
As a result of these changes, the state budget deficit widened to UAH 9.53
billion, or 2.3% of forecasted full-year GDP (up from the previous 1.6% of
GDP). Considering that budget is currently in surplus, the amended budget
parameters envisage considerable fiscal loosening in the last two months of
the year. However, due to last year's sizable pre-election fiscal expansion,
this may not jeopardize the declining trend of the consumer price index at
the end of this year and the beginning of next year.
To ensure budget gap financing, the parliament increased targeted
privatization receipts to UAH 8.6 billion ($1.7 billion). Taking into
account the successful privatization of Kryvorizhstal for a record high
$4.8 billion, this target is not casting any doubts.
However, because of the considerable social liabilities taken during 2004-
2005 and the further increases foreseen in pensions and minimum wages
in 2006, and acknowledging that one-shot privatization revenues aren't
reliable source of fiscal gap financing in the long-term, the government
will need to undertake significant efforts to balance the budget in the
medium-term.
At the beginning of November, the parliament endorsed the draft fiscal
budget for 2006 as a basis for further consideration and sent it back to
the government for revision. The amended draft budget law envisaged
an increase in the targeted budget deficit for 2006 to UAH 12.9 billion
($2.6 billion), or 2.5% of GDP. More than 85% of next year's deficit is
planned to be financed by privatization receipts.
In particular, the government expects to obtain UAH 2.1 billion from new
privatization deals next year, while the rest will be covered by the funds
received from privatization of Kryvorizhstal. The privatization receipts
target may be realistic as key state officials have already announced the
intention to privatize a number of attractive enterprises next year, like
telecommunication monopoly "Ukrtelecom," Nikopol ferroalloy plant
and Odessa port plant.
Over January-October, the stock of public debt increased by 1.3% yoy to
$16.3 billion. By structure, the increase was actually observed for external
debt, which picked up to almost $12 billion, while internal debt continued
to decrease. The increase in external debt was primarily the result of
Eurobonds placements.
In contrast to public debt, the rapid increase in external private debt
raises concerns. According to NBU statistics, since 2004 external medium
and long-term private debt has increased 2.3 times to $8.2 billion as of
mid-2005 and continues to grow. So far, the NBU and the government are
examining measures to tighten eligibility criteria for enterprises desiring
to borrow on external markets.
MONETARY POLICY
In October, the monthly consumer price index (CPI) accelerated slightly to
0.9% month-over-month (mom) on the back of seasonal increases in food
prices. Consumer inflation continued to decline in annual terms, reporting a
12.4% yoy increase, down from 13.9% yoy in the previous month (which is
partially explained by high comparison base.)
Over the month, food prices grew by 13.6% yoy, which is a considerable
deceleration compared to 16% yoy a month ago. The slowdown occurred
primarily due to decelerating prices for meat, sugar and milk. For the first
time since 2003, meat prices declined by 0.6% mom; the reduction may be
attributed to lower demand for meat products, especially chicken, affected
by the "bird flu" concerns.
Following the stabilization of world prices, domestic gasoline prices
dropped 0.3% mom. As result, the annualized non-food price index returned to
a declining trend, reporting a 5.1% yoy increase in October, down from 5.2%
yoy in September. However, the surge in gasoline prices in previous months
stimulated a further increase in transportation tariffs, which accelerated
to 26.1% yoy, up from 23.7% yoy in September.
On account of a further increase in transportation tariffs and the cost of
public utilities (up by 14% yoy in October versus 13.2% yoy a month before),
the services index accelerated to 14.4% yoy, up from 13.5% yoy in September.
In October, the producer price index (PPI) decelerated to 12.8% yoy, down
from 14.6% yoy in September.
According to estimates by the Council of the National Bank of Ukraine (NBU)
announced in mid-November, consumer inflation is expected in the range of
10.5%-12% yoy in 2005, which is quite realistic. In addition to high fuel
prices and increasing utility costs, the price developments through the end
of the year will be affected by inflationary amendments to the 2005 budget
and considerable social payouts at the end of the year.
At the end of November, the privatization auction-winner Mittal Steel
transferred the entire amount for the purchase of Kryvorizhstal. The NBU
quickly converted the amount into hryvnia at an exchange rate of UAH/$ 5.0,
thus replenishing its reserves to $19 billion. Thanks to quick NBU measures,
concerns regarding foreign exchange stability did not materialize.
Large social payouts from the budget as well as capital inflow related to
privatization and future parliamentary elections are causing significant
upward pressure on monetary aggregates. Already in October, the monetary
base accelerated to 34.6% yoy from 27.2% yoy in September, while the
money supply accelerated to 38.6% yoy, up from 31.3% yoy.
Observing current monetary aggregates developments, the Council of the NBU
increased its forecast for monetary base growth in 2005 to 50-55% yoy (up
from the previous 38-43% yoy), while the money supply growth forecast was
raised to 48-53% yoy (up from 40-45% yoy).
Acceleration of deposits growth to 40.3% yoy and currency in circulation by
33% yoy contributed to the expansion of money supply. Rapid growth of
deposits on the back of the unchanged deposit rate (which is much lower
than the annual inflation rate for that period) may be explained by the low
base for comparison. Last year, inflationary expectations and political
uncertainly led to massive withdrawals of deposits from commercial banks.
October reported further acceleration of private sector credit expansion to
48.7% yoy, up from 45% yoy a month before. As the rapid increase in
domestic credit raises concerns regarding the quality of banks' credit
portfolios, the NBU decided to toughen requirements regarding minimum
regulatory capital. Commercial banks will have to adjust their capital to the
new regulation by the end of next year.
INTERNATIONAL TRADE AND CAPITAL
Over January-September, Ukraine's merchandise foreign trade balance
continued to worsen. Weaker external demand for Ukrainian metals, the main
export commodity, reinforced by sharp national currency appreciation in
April, resulted in a quick deceleration of exports over April-September. The
pace of export expansion dropped from a healthy 19.5% yoy in March to a
miserable 0.3% yoy in September.
On the other hand, imports growth accelerated from 9.2% yoy in January to
almost 40.5% yoy in August. In September, imports growth decelerated to
22% yoy; however it still considerably outpaced that of exports. Cumulatively,
FOB exports grew by 6% yoy (versus almost 46% yoy growth in January-
September last year) to $22.3 billion, while CIF imports expanded by
26% yoy to $26 billion.
By product breakdown, exports of metallurgical products rebounded at almost
1% yoy in September following two months of decline. In cumulative terms
however, cross border metals sales continued to slow, reporting a 14% yoy
increase over January-September versus 16% yoy over January-August.
Considering the fact that world prices returned to an upward trend in
September, metals export performance may improve through the end of the
year. A rebound in machinery and equipment exports at 3.6% yoy in
September, after an almost 30% yoy decline in April and May and another
10% yoy decline in July, is encouraging.
Cumulatively, export volumes of these products declined by 11.5% yoy. On
the import side, deceleration of machines and transport equipment imports
and oil and gas imports, the largest contributors to total imports, explains the
total goods import slowdown in September.
In particular, imports of machinery and equipment increased by about 34.7%
yoy over January-September, down from 37.6% yoy in January-August.
Imports of energy resources, the weightiest item in total goods imports,
decelerated to 9.5% yoy over January-September, down from 10.4% yoy a
period ago.
At the same time, Ukraine's foreign trade of services position remained
rather strong according to the State Statistics Committee. Over
January-September, exports of services increased by 11.6% yoy to $4.3
billion, while imports grew by 33.3% yoy to $1.9 billion.
As a result, a surplus of $2.4 billion was registered, just 1.5% yoy lower
than in the corresponding period last year. Despite shrinking by almost 70%
yoy, the foreign trade of goods and services account showed a surplus of
$1.6 billion. Taking into account current foreign trade performance, the
current account will remain in surplus through the end of the year.
OTHER DEVELOPMENTS AND REFORMS AFFECTING
THE INVESTMENT CLIMATE
At the beginning of December during the Ukraine-EU summit, the European
Union declared Ukraine has fulfilled all requirements necessary to be
recognized as a market economy. However, the status will formally be granted
at the beginning of next year due to technicalities. The status will improve
the treatment of Ukrainian exporters in anti-dumping investigations with EU
members.
Moreover, obtaining the status is an important step towards signing a
free-trade agreement with the EU. It may also help in Ukrainian officials'
efforts to simplify the EU visa requirements for Ukrainian citizens.
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NOTE: To read the entire macroeconomic report in a PDF format,
including several color charts and graphics click on the following link:
http://sigmableyzer.com/files/Ukr_Monthly_Ec_Report_11_05.pdf
-----------------------------------------------------------------------------------------------
CONTACT: Olga Pogarska, Kyiv, opogarska@sigmableyzer.com.ua
-----------------------------------------------------------------------------------------------
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. 2005 MARKS THE YEAR UKRAINE BEGAN TO GROW UP
Timoshenko repeatedly ran roughshod over President Viktor Yushchenko's
free market principles, attempting unsuccessfully to fix retail prices for fuel,
meat, public transport and utilities.
EUROPE FEATURES: By Stafan Korshak, Deutsche Presse-Agentur
Kiev, Ukraine, Tuesday, December 20, 2005
KIEV - It's been a bumpy and often uncomfortable 12 months since Ukraine's
Orange Revolution, and Ukrainians have grappled with unfamiliar problems
large and small. The big one, of course, has been: 'How do you run Ukraine
democratically, when no-one has ever done that before?'
So far, the answer has been 'with difficulty'. The coalition government
propelled into power by the Orange protests in December 2004 and in January,
was riddled with in-fighting and lasted only until September.
As always in Ukrainian politics, stylish Julia Timoshenko was at the vortex
of the proceedings. During her nine months as prime minister, Timoshenko
repeatedly ran roughshod over President Viktor Yushchenko's free market
principles, attempting unsuccessfully to fix retail prices for fuel, meat,
public transport and utilities.
Even worse, she led a government vendetta aimed at reversing billions of
dollars in privatizations. Timoshenko's logic was calculated to strike to
the heart of the average Ukrainian voter's antagonism towards the high and
mighty.
She argued the country's narrow tycoon class, who unsurprisingly detest
Timoshenko, stole Soviet factories and farms during the 1990s, and should
now cough up the loot.
Conservative lending agencies like the World Bank and the International
Monetary Fund not to mention Timoshenko's boss, Yushchenko, were
appalled.
The latter sacked her and made it clear the privatizations would stand
allowing investors to heave a sigh of relief.
Yet in November, Yushchenko's government sold off a giant steel mill to an
Indian investor for a cool 4.8 billion dollars in an absolutely transparent
auction, Timoshenko, supposedly in political exile, was right there.
Stylish in a Louis Vitton suit, a beaming Timoshenko declared to cameras,
'Ukraine supports free markets and foreign investors ... this is a great
victory for our government.'
More foreign investment arrived in Ukraine in 2005 than in its entire
previous 13 years of existence combined.
Ukraine's economy hit the doldrums in 2005, with GDP flattening out to about
2.8 per cent due partly to lower international prices for Ukrainian
industrial commodities, and partly 'because for the first time in history a
Ukrainian government made public honest economic statistics,' as Yushchenko
puts it.
The news was bad on the Ukrainian health front as well with bird flu winging
its way to Ukraine in late November, with inevitable scandal as local
officials appear to have ignored the outbreak for almost a month. By the end
of the year, Ukraine was the site of Europe's largest-ever outbreak of bird
flu.
And the worst Ukrainian problem of all, corruption, remained the prime
concern for Ukrainians in 2005, Transparency International found.
Yet even when it came to greedy state employees, unforetold steps were taken
in Ukraine. The year saw purges of the venal customs, tax police, and
regional prosecutors' offices. In June, Yushchenko (after having driven a
couple of hundred kilometres behind the wheel of an unmarked car) simply
abolished the traffic police, on the grounds all they did was collect
bribes.
Yet some Ukrainians set new standards of propriety as well during the year.
Vitaly Klitschko, world heavyweight boxing champion, proved his class in
October. Hit with an injury shortly before facing a challenger, he laid down
his belt and retired from the ring, rather than fight a round or two, take a
fall, and collect an automatic 13 million dollar purse. As the year ended,
he was widely rumoured as Kiev's next mayor.
Football saw a dramatic Ukrainian first this year: the national team, after
more than a decade of trying, qualified for the World Cup tournament. The
achievement of first place in a tough group including Denmark, Turkey and
Greece, caused more than a little political discomfort in Ukraine.
Ukraine Football Federation chief Hryhory Surkis and coach Oleg Blokhin are
Yushchenko's opponents, and stood on the opposite sides of the barricades,
when Yushchenko was leading the Orange Revolution.
Yet, when Yushchenko first met the team including international superstar
Andrei Schevchenko, but mostly consisting of hard-working unknowns like
Dynamo Kyiv half-back Ruslan Rotan, the president was visibly as proud as
Surkis and Blokhin.
'Congratulations, boys, on what you have done,' Yushchenko said. 'You have
proved your pride in your country. Now go to the World Championships, and
prove your country is as good as any other.' -30-
--------------------------------------------------------------------------------------------------
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========================================================
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3. "HEROES OF THE KUCHMA EPOCH: SOME GOING INTO
PARLIAMENT, SOME INTO THE SCRAP HEAP OF HISTORY"
Electoral fortunes of figures in previous Ukrainian administrations
Derkach-yes; Volkov-no; Pinchuk-no; Akhmetov-yes; Azarov-yes.
ANALYSIS AND COMMENTARY: By Leonid Amchuk
Ukrayinska Pravda web site, Kiev, in Ukrainian 16 Dec 05
BBC Monitoring Service, UK, in English, Tue, Dec 20, 2005
KYIV - MP Andriy Derkach, who used to be a prominent supporter of the old
regime, has joined the Socialist Party, a website has said. In looking at
the fortunes of figures who were prominent in the previous authorities, it
said Derkach was welcomed with open arms, despite the unsavoury reputation
of his father. His return to parliament is virtually assured.
No such luck for influential MP Oleksandr Volkov and former President Leonid
Kuchma's son-in-law, tycoon Viktor Pinchuk, rejected from the election lists
of former premier Yuliya Tymoshenko and parliamentary speaker Volodymyr
Lytvyn, respectively.
However, Rinat Akhmetov, said to be Ukraine's richest tycoon, is set to sail
into parliament on the opposition Party of Regions list.
The following is the text of the article by Leonid Amchuk entitled "Heroes
of the Kuchma epoch: some going into parliament, some onto the scrap heap
of history", posted on the Ukrayinska Pravda website on 16 December;
subheadings have been inserted editorially:
We should consider 15 December 2005 the day of the end of the cassette
scandal [recordings made in former President Leonid Kuchma's office
apparently by former bodyguard Maj Mykola Melnychenko, implicating
Kuchma and other senior officials in serious crimes].Of course, a miracle
may happen and it will be decided to use the Melnychenko recordings as
evidence in the [murdered journalist Heorhiy] Gongadze case.
But anyway this whole topic that has lasted five years is right now being
packed away into a cardboard box, pre-packed with mothballs, sealed with
adhesive tape and taken away into the archive. Maybe that's the place for
it.
The cassette scandal is now history, because on Thursday [15 December] it
became clear even to completely romantic people that the former major's
recordings will no longer have any influence on current processes.
On 15 December a landmark event happened - at a sitting of parliament it was
announced that Andriy Derkach was joining the Socialist Party faction. The
Socialist Party [SPU] number two, Yosyp Vinskyy, promised that now Derkach
would "certainly" get a place in the shoe-in section of the SPU election
list: "After all, he's a good MP and acts professionally\ [ellipsis as
published]"
It is indicative that all this happened on the day of the fifth anniversary
of the start of the "Ukraine without Kuchma" movement. And its participants,
in case anyone has forgotten, were demanding the scalp of the current young
socialist's father.
Leonid Derkach [former head of the Security Service] was one of the four
main figures in the cassette scandal. Or, in the classification of another
not so successful candidate to be a SPU deputy, Mykola Melnychenko, Derkach
Sr was a member of "an organized criminal group under the leadership of
Kuchma" and "an accomplice in the physical execution of Heorhiy Gongadze".
In December 2005 Andriy Derkach was welcomed with open arms by the SPU.
Vinskyy explained this to Ukrayinska Pravda with mockery in his voice: "It's
all very simple - Andriy has matured enough to accept socialist ideas!"
"There have long been political contacts between him and me.
Andriy Derkach joined the party via a primary cell in Kiev's Darnytsya
district. And after he became a party member, it was logical for him to join
the faction," Vinskyy added. In reply to a question about the role of
Derkach Jr in the Melnychenko tapes, the socialist boss said: "We don't have
any facts about that. There are questions regarding his father, but we're
not taking him into the party!"
For his part, the socialist [Interior Minister] Yuriy Lutsenko, added that
Andriy Derkach "had made a big contribution to the Orange Revolution". "What
the Era channel did, owned by Derkach, is comparable with the contribution
of TV 5 Kanal," Lutsenko told Ukrayinska Pravda.
Regarding the actual Melnychenko tapes, which Lutsenko personally played on
a tape recorder during the news conference held by [SPU leader Oleksandr]
Moroz on 28 November 2000, the current interior minister said, "We are
living in a free country, where a son is not responsible for his father!"
The theory is just, but in normal life rather than in political life. The
country's development and its image depend on the personal joys or problems
of state figures. What is more, very often politicians solve delicate
questions (corruption, business) through close relatives.
If anyone does not agree with this, then he must recognize that [tycoon MP
Viktor] Pinchuk is not responsible for his father-in-law, Kuchma, [President
Viktor] Yushchenko for his son Andriy [whose playboy lifestyle has been
chronicled by Ukrayinska Pravda] or [opposition leader Viktor] Yanukovych
for the mistakes of his stormy youth [prison sentences].
In effect, taking Derkach into the ranks of the SPU means a rejection by the
socialists of Melnychenko, not as a man with megalomania, but as a
phenomenon that has acted as sewage disposal of the truth about Ukrainian
politics.
However, we are not going to analyse what Andriy Derkach was involved in
during the Kuchma period, what united him with [media mogul] Vadym
Rabynovych and Leonid Derkach with [businessman] Seva [Semen]
Mogilevich [businessman thought to be involved in criminal activities].
Neither will we analyse his actions during the revolution when, thanks to
Derkach, relays of the Maydan [Kiev's Independence Square, heart of the
Orange Revolution] were carried not only on TV 5 Kanal, but also on the
country's main first channel, where Era broadcast from 2300 [local time]
till morning.
What is more, neither does it seem at all shocking that today's socialist
Derkach at the previous elections was elected to parliament as No 11 on the
pro-Kuchma bloc For a United Ukraine. After all, the SPU had joyfully taken
into its ranks the man who was No 4 on that association's list - the
effective head of the Mariupol Illich plant, Volodymyr Boyko.
VOLKOV LEFT HIGH AND DRY
These parliamentary elections are unique - there is a rebirth now under way
of many details that a year ago were considered eternally compromised. Their
political speedometer is being "wound back to zero". They are getting a
chance once again to launch the chronograph of their own history. But the
interesting thing is that far from everyone who yesterday was described as
"an odious figure" has received a pass into the future.
For example, [MP] Oleksandr Volkov has a very high chance of finding himself
outside parliament. His banking on [former Prime Minister] Yuliya Tymoshenko
did not work out. On Wednesday [14 December] they had a lengthy
conversation, during which the once most influential MP was told that he was
not on the YTB [Yuliya Tymoshenko Bloc] list.
And on Thursday there was a sitting of the political council of the
Tymoshenko bloc that approved the draft YTB list. It will be tabled for
consideration by the congress on Saturday [17 December], and Volkov's name
does not figure there.
Tymoshenko took the side of her comrades-in-arms [former Security Service
head Oleksandr] Turchynov, [former Deputy Prime Minister Mykola] Tomenko and
[Tymoshenko's adviser Mykhaylo] Brodskyy, who presented an ultimatum -
either Volkov enters the bloc, or they leave.
The YTB leader found this decision far from easy - according to information
from Ukrayinska Pravda sources, she is aware that Volkov is the carrier of
information about attracting funds into her part of the HQ at the 2004
election of Yushchenko.
On the one hand, the absence of Volkov is a signal that the YTB is still
worried about its image, since the label of a refuge for ex-Kuchmists has
recently been very often pinned on it. But another question arises: if the
socialists consider it possible to take on at the last monument of Kuchma's
former consultant, Andriy Derkach, why are Tymoshenko's people rejecting
Kuchma's former assistant, Volkov, who had been with them for over a year?
Or you could ask the question differently: why are they taking [Vasyl]
Khmelnytskyy, who in recent years was far closer to Kuchma's family?
Maybe the reason is simply that the entry ticket for this co-owner of [steel
mill] Zaporizhstal costs at least 5m dollars, while Volkov wanted to get off
light - "to settle up" with structures of the dying Democratic Union,
consultations of Levenets and his own friendship? Apart from that,
Turchynov, Tomenko and Brodskyy understood that they had a rival in the
shape of Volkov for influence on Tymoshenko.
By getting rid of him, they got an enemy all the more nasty from the
realization that he had now lost his chance of finding another niche in the
2006 elections. It is already too late to offer himself to [parliamentary
speaker Volodymyr] Lytvyn, and Volkov has never been liked in
[propresidential bloc] Our Ukraine, which, however, does not prevent
Yushchenko from calling him for advice.
SNUB FOR PINCHUK
Viktor Pinchuk found himself in a similar situation to that of Volkov. His
only hope was to get into Lytvyn's bloc, but some weeks ago he received a
refusal. For Pinchuk this was especially insulting, because at one time he
had done a lot to get Lytvyn to be what he is - it is precisely the
president's son-in-law who is credited with the 2002 combination, whereby
[Viktor] Medvedchuk became the head of the presidential administration and
his predecessor [Lytvyn] headed parliament.
Pinchuk has now thrown his last forces into breaking the situation that is
surely leading him to lose his seat. He has one more night before the
congress of the speaker's association. The huge interview that Pinchuk gave
to his newspaper Fakty was an attempt to correct his own image.
The commission of inquiry into the cassette scandal, headed by Pinchuk's
trusted agent, Viktor Drachevskyy, was intended as an attempt to prove his
worth to Lytvyn. However, the efficacy of such activity looks laughable.
Lytvyn, who is supplied at the election with everything necessary, does not
need money. The only thing that might allow Pinchuk to get in is to convince
him that the speaker's current election campaign looks wretched and that his
rating has gone into hibernation. And to offer his spin doctors. Another
odious hero of the Kuchma epoch, the former prosecutor-general, Mykhaylo
Potebenko, is deliberately not standing at the election.
He said that he had decided to wrap up politics and would write his memoirs
in retirement. Since nothing is known about [fugitive ex-head of Directorate
for State Affairs] Ihor Bakay, it remains a mystery whether he wants to
stand for parliament. But obviously he will not now be able to get on to any
shoe-in list.
AKHMETOV HEADING FOR PARLIAMENT
But there are no problems regarding the future for [tycoon] Rinat Akhmetov
and [former First Deputy Prime Minister] Mykola Azarov. The former, having
received seventh place on the list, is gradually re-taking control of the
[main opposition party] Party of Regions.
Azarov, who is in twelfth place, has a fair chance of getting back into the
executive, since he never spoilt his relations with the orange people.
But fate has dealt harshly with those who most of all made efforts to
compromise these people - Mykola Melnychenko will not be on the SPU list.
On Thursday the former major met with Oleksandr Moroz, but did not get
a place.
Just as [former MP who was given political asylum in the USA] Oleksandr
Yelyashkevych is not on the draft list being submitted for approval by the
Tymoshenko bloc congress. This is despite the fact that Mykola Tomenko
forecast the appearance of this figure.
In fact, they should have started preparing for the election far earlier.
And, by creating a Mykola Melnychenko bloc, they could dream of entering
parliament independently or at least selling the brand to someone. Now,
however, it is clear that nobody needs him any more. -30-
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4. UKRAINE LEADER YUSHCHENKO DISMISSED GAZPROM
THREATS TO TURN OFF GAS AS 'BLACKMAIL'
AFX Europe (Focus), Kiev, Ukraine, Tue, Dec 20, 2005
KIEV - Ukraine President Viktor Yushchenko dismissed threats by Russian
monopoly Gazprom to end gas supplies to Ukraine unless new prices are agreed
before year-end as "blackmail". "No, they won't shut it off," Yushchenko
told reporters after a news conference in Kiev.
"You know, one has to be absurd in regulating this problem in order to
resort to such (methods)... It's blackmail," he said.
"I don't think that authorities from both sides would lower themselves to
such tones, to such methods. That is not my policy. I'm not used to solving
problems through confrontation."
Yushchenko spoke a day after talks in Moscow between Russian and Ukrainian
premiers failed to resolve the months-long standoff over gas prices, which
centers on Moscow's intention to increase the price of gas for Ukraine to
bring it in line with world market rates.
Currently Ukraine and Russia settle their gas bill by barter, with Moscow
providing Kiev with gas as payment for the transit of Russian gas exports
through Ukraine to Europe, with a base price of 50 usd (42 eur) per 1,000
cubic meters.
Moscow wants to switch to cash payments and more than quadruple the price
of supplies to the Ukrainian market, to 220-230 usd per 1,000 cubic meters.
Gazprom has threatened to cut gas supplies altogether if new terms are not
agreed by Jan 1. Ukraine wants a price increase to be gradually phased in
over several years.
Earlier Tuesday, Ukraine's Prime Minister Yury Yekhanurov said that Kiev
could appeal to the Stockholm International Arbitration Court in order to
resolve the row. "We have a contract and all decisions, if there are
problems, are decided in the Stockholm court," Yekhanurov said during a
news conference.
"So far we have not had any written requests to break the contract, quite
the opposite, we have assurances that the contract will continue to be in
effect," Yekhanurov said. "I hope that such civilized relations will remain
in the future." newsdesk@afxnews.co
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5. UKRAINE COULD SEEK INTL ARBITRATION ON RUSSIAN GAS
Associated Press (AP), Kiev, Ukraine, Tue, December 20, 2005
KIEV - Ukraine's prime minister said Tuesday it may seek international
arbitration over Russian attempts to sharply raise natural gas prices, if
negotiations fail in a bitter dispute that could threaten Russian gas
exports to Europe.
Yuriy Yekhanurov told reporters Kiev might challenge Russian demands at the
Arbitration Institute of the Stockholm Chamber of Commerce, although parties
to a dispute must both agree for the institute to examine their case. "We
have a contract in force. If there are problems, all disputes can be solved
in the courts," Yekhanurov said.
Russia is seeking to more than quadruple the price it charges Ukraine for
gas to bring it to European levels of between $220 and $230 a 1,000 cubic
meters. Kiev, which had been paying $50, asked for the increase to be phased
in over five years to give energy-inefficient industries time to adjust.
Moscow, however, rejected the request and has threatened to close the taps
if a deal isn't signed by Jan. 1, a move that would halt the substantial
Russian gas supplies to western Europe that pass through Ukraine.
The dispute has highlighted a deepening chill in Russian-Ukrainian relations
that set in with last year's Orange Revolution and the pro-Western President
Viktor Yushchenko's rise to power.
Yekhanurov went to Moscow Monday to meet his Russian counterpart, Mikhail
Fradkov, to solve the dispute, but no compromise was found. Yekhanurov
nonetheless expressed hope the problem would be solved through negotiations
between the Ukrainian state-run energy company Naftogaz (NGAZ.YY) and
Russia's state-run natural gas monopoly OAO Gazprom (GSPBEX.RS).
"Gazprom is a reliable institution, which provides gas for almost all of
Europe," he said. "I think it will not use wild methods."
President Viktor Yushchenko again insisted on a gradual increase of gas
prices and criticized Gazprom for what he termed its "irresponsible
approach" - pointing to Gazprom's decision to increase prices for other
former Soviet republics by far less, and in the case of Belarus, not at all.
Georgia, a country where, as in Ukraine, pro-Western leaders have come to
power, agreed Tuesday to pay nearly double the $63 a 1,000 cubic meters of
gas it pays now.
Yushchenko also suggested Ukraine might retaliate by hiking the rent Russia
pays to keep its Black Sea fleet based in the Ukrainian port of Sevastopol.
He said the arrangement should be switched onto a "rational basis." Russia
pays about $93 million a year to Ukraine for use of the Sevastopol port.
Russia supplies almost half the European Union's gas imports, sending some
80% of that through Ukrainian pipelines, and the spat has raised fears
supplies could be interrupted.
Gazprom's deputy board chairman Alexander Medvedev warned only days
were left to resolve the dispute and accused Ukraine of abusing its position
as a key energy transit point for European gas.
"This is impossible to interpret any other way than an attempt to pressure
Russia and Europe to receive preferential treatment for Ukraine's own gas
needs," he said in a statement.
Russian Foreign Minister Sergey Lavrov, however, assured Western European
countries that Russia's gas deliveries would not be interrupted.
Germany, Russia's biggest energy customer in Europe, gets around 30% of its
gas supplies through Ukraine and the head of the German Ruhrgas company
expressed concern at the weekend at possible disruptions to supply.
Poland, another big market for Russia, gets around a sixth of its gas
supplies from Russia through Ukrainian pipelines and has recently vowed to
accelerate efforts to diversify Poland's gas imports to reduce dependency on
Russia. -30-
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6. GAZPROM'S GLOBAL AMBITIONS
Deputy Chairman Medvedev wants Gazprom to grow on the global stage
By Tristana Moore, BBC News, United Kingdom, Tue, Dec 20, 2005
Russia's biggest natural gas company Gazprom has ambitious plans for the
future, deputy chairman Alexander Medvedev tells BBC News in an interview.
"We would like to transform our company from being the world's leading gas
company into a world leading energy company," says Mr Medvedev, who is
also Russia's deputy Prime Minister.
Not only are the world's two largest energy markets - China and the US - on
the radar of the state-controlled giant, which is 51% owned by the
government. It also has firm ambitions to raise its presence in European
energy markets, and it is preparing to expand its production facilities with
the view to become a truly global player.
Gazprom is also keen to allow foreign investors to buy its shares, following
stock market liberalisation plans recently cleared by the Duma. "We will
target market capitalisation of around $250bn-$300bn in the next 5 to 7
years."
GIANT GAS FIELD
Gazprom, which is already the world's largest gas producer, is about to
start pumping gas from the hitherto unexploited Russian parts of the Barents
Sea.
Gazprom has invited foreign oil companies to pitch for participation in a
consortium that should be ready by 1 April next year to start developing the
strategically crucial Shtokman field, 555 kilometres north-east of Murmansk
on the Kola peninsula.
The 1,400 square kilometre large field is set to become the world's largest
offshore gas field with 3.2 trillion cubic metres of gas contained in
reservoirs two kilometres below the seabed, which is itself at 350 metres
depths.
The Shtokman field is one of Gazprom's most significant projects in the next
five years," says Mr Medvedev. It is a unique field, with unique reserves.
"If all goes according to plan, the field should be ready by 2010."
AMERICAN EXPANSION
Gas from the field is set to be pumped through four pipelines to liquefied
natural gas, or LNG, processing plants near Murmansk.
From there, much of the LNG is to be shipped in giant tankers to the North
American markets, which can be reached in just over a week.
"It will enable Gazprom to be a major player in the LNG market in the USA,"
says Mr Medvedev, adding that it is already shipping LNG to North America,
though it hopes the route from the Barents Sea should help reduce costs
compared with current shipping routes.
EUROPEAN PUSH
Gazprom already supplies about half the European Union's gas, yet it is
gearing up even further its exports to the West European market.
It recently started constructing the North European Gas Pipeline, which
stretches 1,200 kilometres across the floor of the Baltic Sea to Western
Europe.
Like the Shtokman field, the pipeline is also due to be completed in 2010,
and it should help Gazprom reach consumers in Germany, the Netherlands,
France and the UK without using pipelines running through any of its
neighbouring countries.
"The North European Gas Pipeline project is necessary to meet the growing
demand in Europe and to improve our export routes," Mr Medvedev says.
INVALUABLE EXPERIENCE
But the pipeline - which is controlled by Gazprom through its 51% stake, but
jointly owned by the German energy companies BASF, and E.ON which each
own a stake of 24.5% - has raised considerable controversy in Germany, its
main European market.
The North European Gas Pipeline recently appointed former German
Chancellor Gerhard Shroeder as its chairman, just weeks after he signed
the pipeline agreement with Russia, soon before he was ousted from office
following September's general election.
His appointment provoked considerable outrage in Germany, amidst
accusations of nepotism. Mr Medvedev is dismissive of the critics.
"The Chairman of the shareholders' committee will be responsible for
co-ordinating the whole consortium, and dealing with the authorities at a
European level," he said. "Gerhard Schroeder's former role as German
Chancellor has given him invaluable experience for this new post."
NO MORE MR NICE GUY
Gazprom's new pipeline forms part of Russia's desire to reduce its
dependence on its neighbours - a move that has attracted angry chants
from Poland and some Baltic states, which complain that they have been
marginalised.
"With this new pipeline, there will be no transit countries, so there are no
related political or economic risks," says Mr Medvedev. In particular,
Russia has clashed with Ukraine.
Western analysts say Gazprom is steadily increasing pressure on Ukraine
in order to mount an attempt to take physical control of Ukraine's vital
pipeline network, which carries 80% of Russia's gas exports.
Crucially, Gazprom has asked Ukraine to give up its discount on gas
imported from Russia: currently the country pays just a small proportion
of the market price, in return for Russia's access to its pipeline network.
This would only be fair, insists Mr Medvedev.
"We have offered a very special price [in the past] - $160 [per thousand
cubic metres] is below prevailing European prices, $160 is the transition
price.
And Gazprom has been driving a hard bargain, with a warning that gas
supplies to Ukraine could be cut off if a deal has not been struck by 1
January - a move that could threaten the country's steel industry's
survival. "I believe that Ukraine should decide how they can pay for a
fair market price," Mr Medvedev says. -30-
===================================================
LINK: http://news.bbc.co.uk/1/hi/business/4531578.stm
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7. GAZPROM'S PRICE REGIME GAMBIT
ANALYSIS: By Peter Lavelle, United Press International (UPI)
Moscow, Russia, Tuesday, December 20, 2005
MOSCOW - A little more than two weeks ago, the Russia-Ukraine natural
gas war appeared to have been all but settled.
Then last week, Alexei Miller, the head of Russia's energy giant Gazprom,
not only denied a deal had been agreed, but Gazprom's position significantly
upped the ante: Ukraine must pay market prices for imported natural gas from
Russia and be reasonably compensated for transit of natural gas through its
territory supplying European markets.
What explains Gazprom's hardened position?
Gazprom originally wanted a new natural gas contract with Ukraine starting
next year that includes abandoning the current barter system of payments for
gas transportation services, as well as demanding Kiev pay the same price
for natural gas as its European customers -- $150-160 tcm vs. the current
$50 tcm of natural gas sold to Gazprom's Ukrainian counterpart, Naftogaz.
Needless to say, Ukraine claims this price increase is out of the question.
In 2004, Ukraine's natural gas consumption exceeded 70 bcm while domestic
production was 20 bcm. Gazprom covered part of this deficiency by providing
Ukraine 29.2 bcm as payment to Naftogaz for transportation services.
Ukraine's competitive advantage in dealing with Gazprom is its geographic
location. The firm transits its natural gas through Ukraine to sell in other
foreign markets. Naftogaz is key to Gazprom's international operations and
this is the leverage Ukraine has in any agreement over the price it pays for
Russia's natural gas, as well as transit fees.
Gazprom's dependence on Ukraine is almost absolute. It earns most of its
income from exports, and its main export route runs directly across Ukraine.
Naftogaz has an extensive network of pipeline corridors that end in Europe.
Gazprom shipped 138 bcm of its total European exports of 153.2 bcm
through the Naftogaz pipeline system in 2004.
Gazprom pays Ukraine a transit tariff of $1.09/mcm/100 km and has proposed
$1.75/mcm/100 km. Ukraine is demanding an increase to $3, which would
essentially cover the cost of the country's imports from Russia.
In an effort to go around Ukraine, Gazprom plans to build a pipeline that
will link the Russian port of Wyborg and the town of Greifswald in
northeastern Germany, running underwater for almost 744 miles. It will
initially provide gas to Germany, and offshoots may subsequently be built to
link it with several other countries, including Britain. The pipeline is
forecast to deliver 20 bcm of natural gas a year, a trifle compared with its
present total export regime.
At loggerheads for months and with the current natural gas delivery
agreement to expire at the year's end, Russian Prime Minister Mikhail
Fradkov paid a short visit to representatives of the European Commission in
early December. Almost immediately, EU Energy Commissioner Andris
Piebalgs said Russia and Ukraine had developed a draft protocol that will
have Ukraine shift to a world gas price regime by 2010.
If agreed to by both governments, the protocol will maintain natural gas
tariffs at current levels in 2006; prices and transit tariffs will then
gradually rise in 2007-09. The document suggests Ukraine's Naftogaz has
moved closer to Gazprom's original proposal.
The Russian energy giant hopes to increase the price of gas delivered to
Ukraine to $160/tcm, with transit tariffs it pays also rising from the
current $1.09/tcm/100 km to $1.75/tcm/100 km.
The agreement would also bring Ukrainian gas prices to $163/tcm by 2010,
according to current oil price assumptions. This is in line with the gas
price of $160/tcm proposed by Gazprom.
According to the protocol, Naftogaz will pay current prices in 2006, then
$90/tcm in 2007, $109/tcm in 2008, $133/tcm in 2009, and $163/tcm in 2010.
The substantially higher payments, approximately $2.5 billion a year, for
Russian gas will be somewhat offset by an increase in transit tariffs for
Gazprom.
When Miller appeared on Russia's English language television station RT last
week he said no protocol was being finalized and Gazprom had not only
changed its negotiating position, but threatened to turn off the taps to
Ukraine (and Europe). Shortly after Miller's television appearance, Deputy
Chairman of Gazprom's Managing Committee Alexander Medvedev declared
Gazprom had upped its price demand to $220-230/tcm.
Why the sudden about face? Two issues appear to be in play.
[1] First, most of the talk and bitterness about the negotiations have come
from the companies most involved -- Gazprom and Naftogaz. When Medvedev
dropped his bombshell that Gazprom's price demand is now much higher, the
politicians entered the fray.
Presidents Vladimir Putin and Viktor Yushchenko have sought to cool tempers.
Putin's statement that the gas dispute should not hinder Russia-Ukraine
relations appears to be directed to Europe to apply pressure on Ukraine to
compromise.
Whatever the final compromise -- most likely similar to the one described by
EU Energy Commissioner Andris Piebalgs -- Putin intends it to be only a
commercial victory for Gazprom, but a political victory for Russia. The
Kremlin wants the EU to see Russia as a trustworthy partner.
[2] The second issue is how this dispute will be perceived by other former
Soviet republics importing Russian natural gas. The drawn-out negotiations
with Ukraine send the powerful message that the days of cheap Russian
natural gas are coming to a close.
Moldova, Georgia and the three Baltic states -- and even Belarus -- have
watched the Russia-Ukraine spat closely and come to the conclusion that
playing hardball with Gazprom is a losing proposition.
The lesson to be learned from the Russia-Ukraine face-off is obvious:
Gazprom is a business and the Kremlin will do what it can to make its assets
generate as much income as the market can accept. -30-
-----------------------------------------------------------------------------------------------------
Peter Lavelle is a Moscow-based analyst who writes for RIA Novosti.
http://www.upi.com/InternationalIntelligence/view.php?StoryID=20051220-015520-6407r
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8. PRESIDENT GETS BUDGET IN UKRAINE
By Judy Dempsey, International Herald Tribune (IHT)
Published by The New York Times
Europe, Wednesday, December 21, 2005
BERLIN - Fending off strong opposition from a coalition of Communists,
political foes and former supporters, President Viktor Yushchenko won a
major battle Tuesday in the Ukrainian Parliament after mustering enough
votes to push through his budget for 2006.
The budget, blocked for several weeks by political parties that have already
started jockeying for position before parliamentary elections in March, was
a key test for Yushchenko and Prime Minister Yuri Yekhanurov.
It was Yushchenko's first significant victory since September, when he
dismissed the government led by Prime Minister Yulia Timoshenko, who
wanted to adopt a radical populist economic program, and replaced her with
Yekhanurov.
Yekhanurov, a leading member of Yushchenko's Our Ukraine party, told
legislators that the budget deficit would be limited to 2.5 percent of gross
domestic product and predicted that the economy would grow 7 percent next
year, despite slow growth so far this year.
"The priorities for next year are to revive macroeconomic balances,"
Yekhanurov said after the vote, according to Reuters. "We will stop eating
up gross domestic product and increase funds for development and
investment."
With only a month left before Ukraine moves from a presidential-type system
to a parliamentary democracy that will endow the new Parliament with broad
powers at the expense of the presidency, Yushchenko seemed determined to
undo some of the mistakes made in his tenure.
But few economists believe there will be any significant changes introduced
before the elections because they would be either too unpopular or would be
blocked by a fractious Parliament.
"So far, there has been no clear privatization strategy, and we do not see
an acceleration of reform," said Elisabetta Falcetti, an analyst on Ukraine
at the European Bank for Reconstruction and Development. "Much now
depends on the outcome of the parliamentary elections."
Those opposing the budget included supporters of Timoshenko, the
Communists and the powerful Party of the Regions, which based in eastern
Ukraine, the country's industrial heartland.
The opposing parties wanted a looser budget deficit in order to gain popular
support during the election campaign, regardless of the country's recent
economic indicators.
Ukraine's economy grew by 2.5 percent for the first nine months of this
year, compared to a growth of over 12 percent for the same period last year,
according to the National Statistics Office.
Falcetti said last year's growth had been driven by high commodity prices,
particularly Chinese demand for steel. This year, however, commodity prices
have been declining, she said.
Ukrainian economists also said that investments had fallen and that the
large trade surplus that Ukraine enjoyed last year had turned into a trade
deficit as consumer demand soared because of a loose fiscal policy adopted
by Timoshenko and the previous administration, led by Viktor Yanukovich.
Yanukovich ran against Yushchenko for president last year but, amid charges
of vote-rigging and fraud, was defeated in a runoff. Just before the
presidential election, Yanukovich had raised pensions and the minimum wage
as a populist measure to win votes.
Ivan Poltevets, an economist at the Institute for Economic Research and
Policy Consulting, which is in Kiev, said that Timoshenko had continued the
populist policies of Yanukovich. "Populist measures have driven up inflation
but also imports because there is now more consumer demand," he said.
During the first eight months of 2005, real household incomes increased by
24.5 percent, largely because of higher social assistance payments.
According to the National Statistics Office, exports for the first 10 months
of this year rose 6 percent but imports jumped 25 percent. The trade surplus
for the first 10 months of last year had amounted to 6 percent of gross
domestic product. This had been turned into a trade deficit of $1 billion
over the same period for 2005.
Poltevets said that the administration had a confused policy over
privatization and no clear reform program, which tended to keep create
extreme caution among investors.
Timoshenko, for example, had wanted a sweeping policy of reprivatization
on the ground that many enterprises had been sold below market prices to
oligarchs close to the former president, Leonid Kuchma. Her opponents
accused her of starting a vendetta against any oligarchs who had supported
the former government. -30-
------------------------------------------------------------------------------------------------
LINK: http://www.iht.com/articles/2005/12/20/news/ukraine.php
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9. PRESIDENT VIKTOR YUSHCHENKO APPOINTS OLEG
SHAMSHUR TO BE UKRAINE'S AMBASSADOR TO USA
Ukrinform, Kyiv, Ukraine, Tuesday , December 20, 2005
KYIV - President Viktor Yushchenko appointed Oleh Shamshur, who
was Deputy Foreign Minister of Ukraine since February 2004, Ukraine's
Extraordinary and Plenipotentiary Ambassador to the USA on Tuesday.
Mr Shamshur worked with the Ukrainian Embassy in Benelux countries
and chaired the EU department of the Foreign Ministry.
The Ukrainian President also appointed Rostyslav Tronenko Ukraine's
Extraordinary and Plenipotentiary Ambassador to Portugal and Yuriy
Malko Extraordinary and Plenipotentiary Ambassador to Romania. -30-
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10. FRENCH BANK BNP PARIBAS SA TO BUY A 51% STAKE IN
UKRAINE'S FIFTH-LARGEST BANK, UKRSIBBANK
Adriana Brasileiro, Dow Jones Newswires, Paris, France, Tu, Dec 20, 2005
PARIS -- BNP Paribas SA (13110.FR) Tuesday said it has agreed to
buy a 51% stake in UkrSibbank, Ukraine's fifth-largest bank, with assets
of $1.4 billion as of June 30.
In a statement, BNP said it has clinched a deal with UkrSibbank's two
largest shareholders who together will keep a 49% stake in the bank.
BNP didn't provide financial details of the deal. BNP is buying the stake
from two businessmen. The bank said the acquisition is "immediately
earnings-accretive." It said it expects the closing of the offer to take
place by the end of the first half of 2006.
Kiev-based UkrSibbank had assets of $1.4 billion at the end of the first
half of 2005, and it employs 10,000 people, BNP said. UkrSibbank is
expected to this year post a net profit of $13 million, compared with
$15 million in 2004, BNP said. (adriana.brasileiro@dowjones.com)
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11. UKRAINE'S KRIVOROZHSTAL TRADE UNION TO TAKE STRIKE
ACTION OVER FAILURE TO PAY HIGHER WAGES BY MITTAL STEEL
By Grigori Gerenstein, Dow Jones, Kyiv, Ukraine, Tue, Dec 20, 2005
KYIV - Over 3,000 members of the Krivorozhstal section of the Ukrainian
Metallurgical and Mining Trade Union will hold a short strike and a
demonstration Friday in protest at the failure of Mittal Steel NV (MT) to
implement a pay deal, Chairman of the Krivorozhstal union Yury Bobchenko
said in a statement Tuesday.
The Krivorozhstal union, which has 50,000 members, has threatened further
action unless Mittal Steel pays higher wages as agreed.
The union said Mittal Steel, which recently acquired a 93.02% stake in the
Krivorozhstal steel smelter, had failed to increase wages by 3.5%, which
was a condition of the purchase.
The union also said it was further agreed that wages would be increased by
12% before the end of this year, but Mittal Steel was showing no sign of
doing so.
A spokeswoman for Krivorozhstal's management declined to comment on
the proposed union action, but said that Mittal Steel's owner, Lakshmi Mittal,
had promised that the management would hold talks with the union, and
"such talks were currently underway."
Krivorozhstal produces 7.8 million metric tons of iron, 7 million tons of
steel and over 6 million tons of steel roll a year. (gerenstein@hotmail.com)
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12. JACKSON-VANIK GRADUATION COALITION UPDATE
Legislation to graduate Ukraine from provisions of Jackson-Vanik Amendment
Amb Steven Pifer & Amb William Miller, Co-Chairmen
Jackson-Vanik Graduation Coalition
Washington, D.C., Wednesday, December 21, 2005
WASHINGTON - Given the Senate's passage by unanimous consent of
legislation to graduate Ukraine from the provisions of the Jackson-Vanik
Amendment in November, the Jackson-Vanik Graduation Coalition on
November 30 launched an effort to urge the U.S. House of Representatives
to take parallel action.
This effort resulted in numerous messages to Congress as the membership
in the Coalition grew to more than 250 businesses and Ukrainian-American,
Jewish-American and non-governmental organizations.
However, the U.S. House adjourned on December 16 without taking action
on Jackson-Vanik graduation. The House is scheduled to return for its next
session on January 31, 2006.
Our soundings on the Hill indicate growing awareness of this issue,
including of the importance of moving on graduation prior to the March 2006
Rada (parliament) elections. This greater awareness is due in large measure
to the letters that have begun to flow to elected Representatives, particularly
those on the House Ways and Means Committee and those who are members
of the Congressional Ukrainian Caucus (CUC).
Our soundings further indicate no opposition per se to graduating Ukraine
and general agreement that Ukraine has met the freedom-of-emigration
requirements of the Jackson-Vanik Amendment.
There appears to be reluctance, however, in the House Ways and Means
Committee (the Committee with primary jurisdiction for Jackson-Vanik,
which Congress considers as a trade bill) to take up graduation legislation
until it has the opportunity to review the U.S.-Ukraine bilateral protocol
on Ukraine's accession to the World Trade Organization (WTO). U.S.-
Ukraine negotiations on the bilateral WTO protocol, while having made
progress in recent weeks, have not yet been concluded.
In preparation for the return of the House of Representatives on January 31,
the Coalition urges those who are interested in seeing Ukraine graduated
from Jackson-Vanik to continue to fax letters supporting Ukraine's
graduation to their members in the U.S. House of Representatives, to the
members of the Congressional Ukrainian Caucus (CUC) and to
members on the House Ways and Means Committee (see list of
Congressional Ukrainian Caucus members, Appendix B, and the House
Ways and Means Committee members, Appendix C, and contact
information below).
The Coalition again recommends that messages also urge members to co-
sponsor HR 1053, introduced by Rep Gerlach of Pennsylvania. We have
been repeatedly told that, of the three House bills pending on Jackson-Vanik
graduation for Ukraine, the Gerlach bill has the greatest receptivity in the
Ways and Means Committee. As of December 14, the Gerlach bill had
33 co-sponsors (the list of co-sponsors is shown below, appendix A).
The greater the number of co-sponsors, of course, the greater the pressure
for early action.
Looking toward the next session of Congress, the Coalition will be
considering the best tactics for securing action in the U.S. House
of Representatives and for engaging the Bush Administration to make a
more forceful push for Ukraine's graduation.
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A. HR 1053 (Gerlach Bill) CO-SPONSORS AS OF DECEMBER 16
To graduate Ukraine from the Jackson-Vanik Amendment
33 U.S. House members have signed on as co-sponsors
(Members are listed by date each agreed to be a co-sponsor)
Rep Harman, Jane [CA-36] - 3/2/2005
Rep Weldon, Curt [PA-7] - 3/2/2005
Rep Kennedy, Mark R. [MN-6] - 3/2/2005
Rep Kaptur, Marcy [OH-9] - 3/2/2005
Rep Burton, Dan [IN-5] - 3/2/2005
Rep Bartlett, Roscoe G. [MD-6] - 3/10/2005
Rep Snyder, Vic [AR-2] - 4/14/2005
Rep Platts, Todd Russell [PA-19] - 11/10/2005
Rep Fitzpatrick, Michael G. [PA-8] - 11/10/2005
Rep Boehlert, Sherwood [NY-24] - 11/16/2005
Rep Schwarz, John J.H. "Joe" [MI-7] - 11/16/2005
Rep Pitts, Joseph R. [PA-16] - 11/18/2005
Rep Smith, Christopher H. [NJ-4] - 11/18/2005
Rep Dent, Charles W. [PA-15] - 11/18/2005
Rep Diaz-Balart, Lincoln [FL-21] - 11/18/2005
Rep McNulty, Michael R. [NY-21] - 12/6/2005
Rep Andrews, Robert E. [NJ-1] - 12/6/2005
Rep Shuster, Bill [PA-9] - 12/6/2005
Rep Crowley, Joseph [NY-7] - 12/6/2005
Rep English, Phil [PA-3] - 12/6/2005
Rep Wexler, Robert [FL-19] - 12/7/2005
Rep Peterson, John E. [PA-5] - 12/7/2005
Rep Langevin, James R. [RI-2] - 12/7/2005
Rep McCotter, Thaddeus G. [MI-11] - 12/13/2005
Rep Rothman, Steven R. [NJ-9] - 12/13/2005
Rep Hinchey, Maurice D. [NY-22] - 12/13/2005
Rep Kolbe, Jim [AZ-8] - 12/13/2005
Rep Berman, Howard L. [CA-28] - 12/13/2005
Rep Gallegly, Elton [CA-24] - 12/14/2005
Rep Diaz-Balart, Mario [FL-25] - 12/14/2005
Rep Fossella, Vito [NY-13] - 12/14/2005
Rep Schwartz, Allyson Y. [PA-13] - 12/15/2005
Rep Lowey, Nita M. [NY-18] - 12/15/2005
-----------------------------------------------------------------------------------------------
B. CONGRESSIONAL UKRAINIAN CAUCUS (CUC) MEMBERS
Members who are already co-sponsors of H.R. 1053 are marked as such
(1) Rep. Roscoe Bartlett (R-MD), Co-chair, Co-sponsor H.R. 1053
Contact: Monica DeLong
Phone: (202) 225-2721; Fax: (202) 225-2193
(2) Rep. Marcy Kaptur (D-OH), Co-chair, Co-sponsor H.R. 1053
Contact: Jessica Roach
Phone: (202) 225-4146; Fax: (202) 225-7711
(3) Rep. Sander Levin (D-MI), Co-chair
Contact: Jeff Ziarko
Phone: (202) 225-4961; Fax: (202) 226-1033
(4) Rep. Curt Weldon (R-PA), Co-chair, Co-sponsor H.R. 1053
Contact: Yevgeny Bendersky
Phone: (202) 225-2011; Fax: (202) 225-8137
(5) Rep. Andrews, Robert (D-NJ) Co-sponsor H.R. 1053
Contact: David Weinreich
Phone: (202) 225-6501; Fax: (202) 225-6583
(6) Rep. Howard Berman (D-CA) Co-sponsor H.R. 1053
Contact: Doug Campbell
Phone: (202) 225-4695; Fax: (202) 225-3196
(7) Rep. Corrine Brown (D-FL)
Contact: David Simon
Phone: (202) 225-0123; Fax: (202) 225-2256
(8) Rep. Sherrod Brown (D-OH)
Contact: Brett Gibson
Phone: (202) 225-3401; Fax: (202) 225-2266
(9) Rep. Crowley, Joseph (D-NY) Co-sponsor H.R. 1053
Contact: Gregg Sheiowitz
Phone: (202) 225 3965; Fax: (202) 225-1909
(10) Rep. Danny Davis (D-IL)
Contact: Evan Decresce
Phone: (202) 225-5006; Fax: (202) 225-5641
(11) Rep. Lloyd Doggett (D-TX)
Contact: Oscar Quinones
Phone: (202) 225-4865; Fax: (202) 225-2947
(12) Rep. Eliot Engel (D-NY)
Contact: Sasha Suderow
Phone: (202) 225-2464; Fax: (202) 225-5513
(13) Rep. Fitzpatrick, Mike (R-PA) Co-sponsor H.R. 1053
Contact: Greg Calhoun
Phone: (202) 225-4276; Fax: (202) 225-9511
(14) Rep. Luis Gutierrez (D-IL)
Contact: Joan Kato
Phone: (202) 225-8203; Fax: (202) 225-7810
(15) Rep. Hastings, Alcee (D-FL)
Contact: Fred Turner
Phone: (202) 225 1313; Fax: (202) 225 1171
(16) Rep. Maurice Hinchey (D-NY) Co-sponsor H.R. 1053
Contact: Moira Campion
Phone: (202) 225-6335; Fax: (202) 226-0774
(17) Rep. Holden, Tim (D-PA)
Contact: Keith Pemrick
Phone: (202) 225 5546; Fax: (202) 226 0996
(18) Rep. Issa, Darell (R-CA)
Contact: Laurent Crenshaw
Phone: (202) 225 3906; Fax: (202) 225 3303
(19) Rep. Kildee, Dale (D-MI)
Contact: Chris Mansour
Phone: (202) 225 3611; Fax: (202) 225 6393
(20) Rep. Joe Knollenberg (R-MI)
Contact: Craig Albright
Phone: (202) 225-5802; Fax: (202) 226-2356
(21) Rep. Kucinich, Dennis (D-OH)
Contact: Samantha Stinney
Phone: (202) 225-5871; Fax: 9202) 225-5745
(22) Rep. Langevin, James (D-RI) Co-sponsor H.R. 1053
Contact: Brian Daniels
Phone: (202) 225-2735; Fax: (202) 225-5976
(23) Rep. Lantos, Tom (D-CA)
Mr. Lantos is the minority leader on the House Committee on
International Relations. His office refers Jackson-Vanik type
issues to the International Relations Subcommitte on Europe
and Emerging Threats.
Majority Staff Dir.: Richard Mereu
Minority Staff Dir.: Jonathan Katz
Phone: (202) 226-7820; Fax: (202) 226-2722
(24) Rep. Lipinski, Dan (D-IL)
Contact: Emily Chibnall
Phone: (202) 225 5701; Fax: (202) 225 1012
(25) Rep. Lowey, Nita (D-NY) Co-sponsor H.R. 1053
Contact: Beth Tritter
Phone: (202) 225-6506; Fax: (202) 225-0546
(26) Rep. McNulty, Michael (D-NY) Co-sponsor H.R. 1053
Contact: David Torian
Phone: (202) 225-5076; Fax: (202) 225-5077
(27) Rep. Menendez, Robert (D-NJ)
Contact: Jessica Lewis
Phone: (202) 225-7919; Fax: (202) 226-6025
(28) Rep. Pallone, Frank (D-NJ)
Contact: Jim Delmonico
Phone: (202) 225-4671; Fax: (202) 225-9665
(29) Rep. Pascrell, Bill (D-NJ)
Contact: Susan Quatron
Phone: (202) 225-5751; Fax: (202) 225-5782
(30) Rep. Pelosi, Nancy (D-CA)
Contact: Mike Sheehy
Phone: (202) 225-4965; Fax: (202) 225-8259
(31) Rep. Rangel, Charles (D-NY)
Contact: George Dalley
Phone: (202) 225-4365; Fax: (202) 225-0816
(32) Rep. Rothman, Steven (D-NJ) Cosponsor H.R. 1053
Contact: Shelly Stoneman
Phone: (202) 225-5061; Fax: (202) 225-5851
(33) Rep. Schwartz, Allyson (D-PA) Co-sponsor H.R. 1053
Contact: Aaron Brand
Phone: (202) 225 6111; Fax: (202) 226 0611
(34) Rep. Sherman, Brad (D-CA)
Contact: Dawn MacDonald
Phone: (202) 225 5911; Fax: (202) 225 5879
(35) Rep. Slaughter, Louise M. (D-NY)
Contact: Alan Snyder
Phone: (202) 225 3615; Fax: (202) 225 7822
(36) Rep. Smith, Christopher (R-NJ) Co-sponsor H.R. 1053
Contact: Kate Benedetti
Phone: (202) 225-3765; Fax: (202) 225-7768
(37) Rep. Waxman, Henry (D-CA)
Contact: Zahava Goldman
Phone: (202) 225-3976; Fax: (202) 225-4099
(38) Rep. Weiner, Anthony (D-NY)
Contact: Joshua Fa-Hurvitz
Phone: (202) 225-6616; Fax: (202) 226-7253
(39) Rep. Wexler, Rob (D-FL) Cosponsor H.R. 1053
Contact: Halie Soifer
Phone: (202) 225-3001 Fax: (202) 225-5974
(40) Rep. Wilson, Joe (R-SC)
Contact: Dino Teppara
Phone: (202) 225 2452; Fax: (202) 225 2455
PLEASE TAKE ACTION NOW
Due to tight security/screening requirements, regular mail to Congress can
be significantly delayed (like up to two weeks or more); we therefore
recommend that letters be faxed.
Please take action now to quickly and substantially increase the number
of Members of the House who are co-sponsors of H.R. 1053. This is
very, very important to the success of Ukraine's graduation from the
Jackson-Vanik amendment in 2006.
-----------------------------------------------------------------------------------------------
C. U.S. HOUSE WAYS AND MEANS COMMITTEE MEMBERS
CONGRESSMAN BILL THOMAS, CHAIRMAN
Contact Information
Rep. William M. Thomas (R-CA)
(22nd District of California)
2208 Rayburn House Office Building
Washington, DC 20515
Ph. 202-225-2915; FAX: 202-225-8798
Also send letters to the Congressman's district offices in California.
Office of Congressman William M. Thomas
4100 Empire Drive, Suite 150
Bakersfield, California 93309
Ph. 661-327-3611; FAX: 661-637-0867
Office of Congressman William M. Thomas
5805 Capistrano Avenue, Suite C
Atascadero, CA 93422
Ph. 805-461-1034 - North County
Ph. 805-549-0390 - South County
FAX: 805-461-1323
KEY COMMITTEE: HOUSE WAYS AND MEANS COMMITTEE
Key subcommittee: Trade Subcommittee
Contact Information
Trade Subcommittee (Ways and Means)
Contact: Stephanie Lester
1104 Longworth HOB, Washington, DC 20515-6354
Phone: (202) 225-6649; Fax: (202) 226-0158
REPUBLICAN MEMBERS OF TRADE SUBCOMMITTEE:
(1) E. Clay Shaw, FL, Chairman
Phone: (202) 225-3026; Fax: (202) 225-8398
(2) Wally Herger, CA
Phone: (202) 225-3076; Fax: (202) 226-0852
(3) Phil English, PA
Phone: (202) 225-5406; Fax: (202) 225-3103
(4) Jim Nussle, IA
Phone: (202) 225-2911; Fax: (202) 225-9129
(5) Jerry Weller, IL
Phone: (202) 225-3635; Fax: (202) 225-3521
(6) Ron Lewis, KY
Phone: (202) 225-3501; Fax: (202) 226-2019
(7) Mark Foley, FL
Phone: (202) 225-5792; Fax: (202) 225-3132
(8) Kevin Brady, TX
Phone: (202) 225-4901; Fax: (202) 225-5524
(9) Thomas M. Reynolds, NY;
Phone: (202) 225-5265; Fax: (202) 225-5910
DEMOCRAT MEMBERS OF TRADE SUBCOMMITTEE
(1) Benjamin L. Cardin, MD
Phone: (202) 225-4016; Fax: (202) 225-9219
(2) Sander M. Levin, MI
Phone: 202-225-4961; Fax: 202-226-1033
(3) William J. Jefferson, LA
Phone: 202-225-6636; Fax: 202-225-1988
(4) John S. Tanner, TN
Phone: 202-225-4714; Fax: 202-225-1765
(5) John B. Larson, CT
Phone: 202-225-2265; Fax: 202-225-1031
(6) Jim McDermott, WA
Phone: 202-225-3106; Fax: 202-225-6197
REMAINING MEMBERS OF THE HOUSE WAYS AND
MEANS COMMITTEE
REPUBLICANS -----------
(1) Nancy L. Johnson, CT
Phone: 202-225-4476; Fax: 202-225-4488
(2) Jim McCrery, LA
Phone: 202-225-2777; Fax: 202-225-8039
(3) Dave Camp, MI
Phone: 202-225-3561; Fax: 202-225-9679
(4) Jim Ramstad, MN
Phone: 202-225-2871; Fax: 202-225-6351
(5) Sam Johnson, TX
Phone: 202-225-4201; Fax: 202-225-1485
(6) J.D. Hayworth, AZ
Phone: 202-225-2190; Fax: 202-225-3263
(7) Kenny C. Hulshof, MO
Phone: 202-225-2956; Fax: 202-225-5712
(8) Paul Ryan, WI
Phone: 202-225-3031; Fax: 202-225-3393
(9) Eric Cantor, VA
Phone: 202-225-2815; Fax: 202-225-0011
(10) John Linder, GA
Phone: 202-225-4272; Fax: 202-225-4696
(11) Bob Beauprez, CO
Phone: 202-225-2645; Fax: 202-225-5278
(12) Melissa A. Hart, PA
Phone: 202-225-2565; Fax: 202-226-2274
(13) Chris Chocola, IN
Phone: 202-225-3915; Fax: 202-225-6798
(14) Devin Nunes, CA
Phone: 202-225-2523; Fax: 202-225-3404
DEMOCRATS ----------
(1) Charles B. Rangel, NY
Phone: 202-225-4365; Fax: 202-225-0816
(2) Fortney Pete Stark, CA
Phone: 202-225-5056; Fax: 202-226-3805
(3) John Lewis, GA
Phone: 202-225-3801; Fax: 202-225-0351
(4) Richard E. Neal, MA
Phone: 202-225-5601; Fax: 202-225-8112
(5) Michael R. McNulty, NY
Phone: 202-225-5076; Fax: 202-225-5077
(6) Xavier Becerra, CA
Phone: 202-225-6235; Fax: 202-225-2202
(7) Lloyd Doggett, TX
Phone: 202-225-4865; Fax: 202-225-2947
(8) Earl Pomeroy, ND
Phone: 202-225-2611; fax: 202-226-0893
(9) Stephanie Tubbs Jones, OH
Phone: 202-225-7032; fax: 202-225-1339
(10) Mike Thompson, CA
Phone: 202-225-3311; Fax: 202-225-4335
(11) Rahm Emanuel, IL
Phone: 202-225-4061; Fax: 202-225-5603
PLEASE TAKE ACTION NOW
Due to tight security/screening requirements, regular mail to Congress can
be significantly delayed (like up to two weeks or more); we therefore
recommend that letters be faxed.
Please take action now to quickly and substantially increase the number
of Members of the House who are co-sponsors of H.R. 1053. This is
very, very important to the success of Ukraine's graduation from the
Jackson-Vanik amendment in 2006. -30-
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13. UKRAINIAN EXCHANGE STUDENT NINA KONDRATENKO TO
EXPERIENCE DIFFERENT HOLIDAY CELEBRATIONS IN MONTANA
Her hometown is Mykolayi, Ukraine, population 500,000
Bill Vander Weele, Sidney Herald, Sidney, Montana, Tue, Dec 20, 2005
SIDNEY, Montana - Foreign exchange student Nina Kondratenko says
celebrating holidays in the Ukraine is different than in the United States.
When Nina Kondratenko celebrates Christmas this year, things will certainly
be different for her - even the day she is accustomed to celebrate the
holiday.
The foreign exchange student from Ukraine explains her native land
celebrates the birth of Christ on Jan. 7. "Basically, your Christmas is
celebrated like our New Year," Kondratenko, a student at Sidney High
School, said.
On Christmas Day in Ukraine, she explains 12 traditional recipes are brought
to a person's godfather's and godmother's house. Those sacred dishes include
dumplings, cabbage rolls, dried fruits with honey in them and rice with
dried grapes. "You have to have one bit of each one," Kondratenko, who's
host parents are Don Jr. and DelRae Steinbeisser.
She also mentions that for the four weeks prior to Christmas individuals
give up eating meat, egg or milk products. "Basically, you eat breads and
soups (during the time before Christmas)," Kondratenko said. "On Christmas,
you can start eating all of those things."
Christmas caroling is also a great tradition in the Ukraine. "Everybody does
it. It doesn't depend on your age," she said. At the houses where carolers
sing, the owner of the house throws wheat at the singers. "Wheat represents
that they want to bless you," Kondratenko said.
Another tradition of Christmas caroling is having individuals dressed as a
goat, three wisemen and a shepherd. "And they act out a little play that
includes the Bible's history of Christmas."
She describes the Christmas Eve church service as "gorgeous" and says lilies
are among the decorations in the church. She said congregation members
listen carefully as the priest describes how Christ sacrificed his life.
There are five churches in Kondratenko's home city of Mykolayi, a population
of 500,000. Christian Orthodox is the dominant faith.
As far as the New Year's celebration, families have New Year's trees similar
to the U.S. Christmas trees. They usually are up through January. "Homemade
ornaments are really appreciated," Kondratenko said. Presents are delivered
from Father Frost of the North Pole. "It's the same as Santa Claus, but he's
called another way."
A huge tree is located in the center of the city where there is free ice
cream, tea and coffee. There are also small presents for children offered
there. "You can see fireworks from about 8 p.m. to 6 in the morning,"
Kondratenko said. "They are wonderful."
As midnight to bring in a new year hits, individuals can make a wish come
true by writing a wish on a small piece of paper, burning it, putting it in
a glass of champagne and then drinking it.
"You have to do all of that in the period of the 12 strikes (of the clock),"
Kondratenko said. She explains a wish usually is for the good health of
parents or others. "It's like a wish to God," Kondratenko said. -30-
--------------------------------------------------------------------------------------------
LINK: http://www.sidneyherald.com/articles/2005/12/20/news/news02.txt
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14. LVIV: ANOTHER RETURN OF A RIGHTEOUS MAN
100 years ago Andriy Sheptytsky founded a museum that will bear his name
By Iryna YEHOROVA, The Day Weekly Digest in English, #41`
Kyiv, Ukraine, Tuesday, December 20, 2005
The National Museum of Lviv was founded 100 years ago by Count Andriy
Sheptytsky, Metropolitan of Halych. Historical justice has been finally
restored as President Viktor Yushchenko has just issued a decree to name
the museum after its founder.
The key festivities took place on Dec. 15, although the jubilee exhibit
opened on Monday night. It so happened that the Verkhovna Rada was
holding "Government Days," and the MPs were discussing the situation and
prospects of protecting the monuments of Ukraine's cultural heritage.
The statistics cited from the rostrum sounded alarming: between 50 and 70
percent of such monuments are in "unsatisfactory" condition in various
regions, with every 10th listed as critical; preliminary estimates point to
some 600 million hryvnias' worth of repairs and restoration works.
The museum in Lviv was not mentioned during the parliamentary hearings,
although Minister of Culture and Tourism Ihor Likhovy mentioned insufficient
funding of museums and restoration works among the problems faced by his
ministry.
He stated that in early 2004 a total of 700,000 monuments of Ukraine's
national cultural heritage needed restoration, and that only 12,000 were
restored. Likhovy said that among his ministry's priorities are matters
relating to the legal regulation of museums and strengthening their material
and technical base.
Of course, this is a crucial need today. But even more important is the
awareness of personal responsibility for our national heritage, all those
great treasures that we inherited from our forefathers. This responsibility
must be assumed by museum staff, bureaucrats, and philanthropists. We
must do this for the sake of our future; the entire history of the National
Museum of Lviv attests to this.
Andriy Sheptytsky was a patron of the arts, an attentive and generous patron
and philanthropist. In February 1905 he founded a church museum on the
premises of the metropolitanate, at St. George's Cathedral. This museum was
destined to become a celebrated institution showcasing a national cultural
and spiritual treasure trove.
The first cornerstones of the museum collections were books (rare
manuscripts and ancient books), icons, embroideries, wood carvings, and
other religious articles that the metropolitan acquired at his own expense
from the Basilian monasteries of Ivano-Frankivsk, Lviv, Chervonohrad,
Lavriv, and Krekhiv, as well as antiques from the Sheptytsky family
collection.
Subsequently, the scholarly foundation "Lviv Church Museum," which was
legally ratified by a notarized deed dated Dec. 29, 1908, acquired national
museum status; the decision was made at a meeting of the museum's
Curatorship on Dec. 18, 1909. The following year the museum was officially
named after Count Andriy Sheptytsky, Metropolitan of Lviv. In December
1913 the national museum was ceremoniously transferred to the public domain
of Ukraine.
"My beloved people! To you I hereby present my most beloved child. May it
grow and prosper and add to your glory, for the benefit of your future."
With these words the metropolitan's museum acquired special status and began
its operations with his blessing and many years of zealous care.
In the first 25 years of the museum's existence Metropolitan Sheptytsky
donated 111,000 dollars and enriched the collection with almost 10,000 works
of art, including decorative and applied art, rare manuscripts, and other
items. Other distinguished personalities contributed to the museum, among
them the historian Anton Petrushevych (he donated 1,057 items), Professor
Volodymyr Shukhevych (2,972), and the Prosvita Society (984).
Another unique personality should be mentioned in connection with the
museum. Ilarion Sventsitsky headed the museum from 1905 to 1952 and carried
out a great deal of scholarly and promotional work, effectively representing
the museum at various research centers, societies, archives, and libraries
in Vienna, Warsaw, Prague, Sofia, Rome, Stockholm, Miensk, Moscow, Vilnius,
and St. Petersburg.
He worked hard to establish close contacts between cultural centers west and
east of Ukraine. Owing to Sventsitsky's indefatigable efforts, the museum
evolved into an important center for the preservation, study, and
popularization of Ukrainian culture in the general European context.
The jubilee of the museum was an important event not just for Lviv, which
attracted museum workers, historians, and art specialists from all over
Ukraine. The museum prepared special exhibits for the occasion: "Echo of the
Centuries: From the Lviv National Museum's Treasure Trove," "Ukrainian Art
at the Turn of the 20th Century," "Early Ukrainian Art of the late 15th-18th
Centuries."
Today every exhibition hall of the museum presents a certain historical
period of Ukraine as a large-scale aesthetic phenomenon, illustrating the
creative achievements, innovative trends, and unique processes all
juxtaposed against similar examples of world art.
The visitors were delighted to witness the launch of the art books The
Mother of God and the Child and The National Museum: 100th Anniversary. The
latter was a joint project, funded by Bohdan Shevchuk, a businessman from
Donetsk, and published in Kyiv. This type of collaboration is further proof
that the national museum is a site where the proofs of our common culture
are stored. This distinguished collection is duly honored and leaves a firm
imprint on our nation's consciousness.
However, there was no way of avoiding the proverbial fly in the ointment
during the great museum jubilee. The Ukrainian state lacks the funds to
maintain such museums, let alone buy up-to-date equipment, including
humidifiers that all museums need. There are no adequate workstations to
build databases on the masterpieces.
The museum staff does not even expect salary increases; instead, they are
dreaming of new protection systems to help preserve their ancient icons. The
museum's collection of icons numbers 4,000 items and is thus the largest and
most representative collection in the world.
They also need stands and showcases in which to display ancient metals and
fabrics. The building has long been in need of an overhaul (there are plans
to do this), so that it could host an exhibit dedicated to Metropolitan
Sheptytsky and the first employees of the museum.
This means that even if the Ukrainian government cannot fund this project,
there should be individuals willing to provide the money. The museum needs
philanthropic aid as well as help from an association of influential museum
lovers. There was such an association in Sheptytsky's lifetime and its members
did much to help the museum. There is none today. No artists have donated
their works to the museum, which would not only enrich the museum's fonds,
but also honor the artist in the eyes of future generations.
Unfortunately, we often wait for someone else to come to our aid with gifts.
Metropolitan Sheptytsky never expected favors from anyone and worked
wonders with his own hands. We are thus marking the museum's centennial,
knowing that its worth cannot be assessed; for us it is invaluable. -30-
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LINK: http://www.day.kiev.ua/154821/
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15. SECRETS OF THE FOREST
The artist Ori Gersht spent last winter videoing this wood in Ukraine.
Why? Adrian Searle discovers the terrible story behind it.
By Adrian Searle, The Guardian, London, UK, Tue, Dec 20, 2005
A tree falls in the forest and the camera follows it down. The trunk crashes
through the undergrowth in a cascade of leaves and dust, which hangs like
smoke in a shaft of new sunlight. For a moment the birdsong and the dry
background sizzle of insects fall silent. The last leaves twirl slowly
earthward. Crash. There goes another one, this time noiselessly, and then
another, with a cracking, rumbling bass note as it thuds into the earth. The
trees fall this way and that. Slowly and inexorably toppling, they take
longer to drop than one might imagine.
The camera keeps moving, tracking and panning between the trunks, some so
close that they loom unfocused, like bodies passing before the camera. A
moving shadow preceding a falling trunk as it drops into the frame. The
camera's slow passage allows us to linger even on a fly, hovering and
zigzagging in the air, the bright patches of green beech leaves, the sky
seen through a break in the canopy. The editing is restrained, the track of
the camera measured and purposeful.
But what is the purpose of Ori Gersht's The Forest, currently at London's
Photographers' Gallery, and shown in conjunction with a series of
photographs of landscapes, farm buildings and trees - which, by contrast,
seem either snatched, juddery, whited-out, or whose images are swept into
a sometimes almost indecipherable blur?
Gersht was born in Tel Aviv and has lived London for 17 years, arriving
soon after completing his military service in Israel. He has photographed
the pockmarked and war-scarred tower blocks of Sarajevo and the view of the
sky from his own highrise flat in London; he has recorded sports stadiums in
Germany and London, the flat-roofed, modernist schools built in Britain
during the 1950s and 60s. He has also photographed the view from the windows
of a passenger train on the route between Krakow and Auschwitz - trying, and
often failing, to capture fleeting images as the train rushed through the
Polish countryside.
Last winter, Gersht travelled to the small town of Kosov, among the vestiges
of the great forest that once covered Europe, in western Ukraine. This is
where Gersht's father-in-law, Gideon Engler, came from, and where, with his
brother and father, he hid first in a hole in the ground and then in an
attic, after Kosov was declared Judenrein, or cleansed of Jews, in November
1942.
Soon after this Gideon's mother went missing, either shipped out to a death
camp or led into the woods and shot. In the first Nazi aktion, 2,180 Jews
from Kosov were taken to the mountain overlooking the town, in the forest
of Moskalovka, ordered to undress at the "end of a whip", then to jump into
one of two large pits where, one by one, they were shot. In order to save
bullets, children were thrown in alive. The massacre continued the next
day, in front of perhaps thousands of local spectators. The local schools
were closed specially so the town's children could watch.
During the war, Baruch Engler, Gideon's father and a prominent Zionist
activist, kept a diary, which Gersht read before his journey. Baruch was
also a member of a "Help Committee", which, as a point of contact with the
German and collaborationist Ukrainian authorities, tried by one means or
another to lessen the suffering of the Jewish populace.
Engler's account of his years in hiding tells that he somehow got hold of
some lengths of rope, so he and his two sons could hang themselves if
capture seemed imminent. Gideon recalls his anxiety that, as a six-year-old,
he was too small to hang himself. This terrible story is recounted in Jeremy
Millar's long and thoughtful catalogue essay to Gersht's exhibition.
The photographs accompanying Gersht's film come from a series called
Liquidation. What is being liquidated? Time, memory, people (no one is
visible, only the signs of their habitation), the images, or reality itself?
As the images smear into a blur, or judder, or approach blankness, it is
hard to know whether the cause of these aberrations was the hand that held
the camera shaking uncontrollably, or the view itself is being convulsed in
some kind of seizure or earthquake.
As in Gerhard Richter's famous October 18 1977 cycle of blurred and
frequently unfocused paintings, derived from photographs, it is as though
the images were afflicted by a kind of hysterical blindness, an inability to
look made manifest, palpable and concrete. The sensation is very like
fainting. Something, at least, is making it difficult to focus or see
clearly, both in Richter's paintings and Gersht's photographs.
My difficulty with Gersht's photographs is less to do with their metaphoric
status, or what they represent, than with the artistic familiarity of his
pictorial gambits. Too many artists have followed Richter's procedure (Paul
Winstanley's blurry paintings of rooms, and Thomas Ruff's out-of-focus
photographs, reshot from porn images, are but two examples). Richter
himself has found it impossible to deal with the Holocaust, except
obliquely. He never repainted the photos of concentration camps and
piles of bodies that he collected in his atlas of photographic material.
Instead, Richter focused on the German landscape, hillsides and forests,
which recall both German Romantic painting and an idea of Heimat
(homeland), which he then proceeded to paint in a distinctly unheimlich
or uncanny way, as if the places themselves were somehow infected or
undergoing obliteration.
Dragging up Richter here may seem unfair, but it is difficult to avoid his
example, whatever great weight of subject matter is behind, or embedded in
Gersht's photographs of the landscapes of Ukraine, or his earlier
photographs, called White Noise, taken in Poland. Without their subtext,
they lose their specificity. But this can be taken as another aspect of
their meaning - in that their very emptiness is a record of absence, of the
hidden, the disappearance of history.
The eye passes over the photograph but cannot penetrate it. There is no
mental adjustment we can make that will give it clarity, except by recourse
to place, circumstance and the photographer's intention. And once we know
the nature of these images, and what once happened in the forest, there's no
turning back.
Both Millar and Steven Bode, who wrote a second essay in Gersht's catalogue,
invoke the conundrum "If a tree falls in a forest and there is no one there
to hear it, does it make a sound?" - a question often attributed to the
18th-century philosopher Bishop Berkeley. Berkeley, a churchman, wrote the
dictum "esse est percipi": to be is to be perceived.
The Ukrainians and Germans circling the pits on the mountain certainly
witnessed the Jews being herded to their deaths. Via Gersht, we witness the
trees falling in the forest. But how far can you trust a pixillated, digital
DVD - or a photograph come to that?
In Berkeley's universe, whether or not anyone hears the tree fall, God
witnesses it. He might as well have said "stuff happens". What is at stake
here is a notion of the real. Millar quotes Hitler's rhetorical remark, "Who
remembers the extermination of the Armenians?" and notes that the Turkish
novelist Orhan Pamuk remembers. It was Pamuk's mild statement of fact, and
his question as to why no one wants to talk about it, that led him into the
farcical, obscene brawl that terminated events in a Turkish courtroom last
Friday.
Call it what you will - extermination, genocide, ethnic cleansing - the
false consciousness by which such events are at the same moment both
remembered and suppressed is a denial of the real. Suppression is not the
same thing as forgetting, though the total erasure of memory is the ultimate
goal of the urge to suppress.
As Harold Pinter said, in his recent Nobel address, of America's recent
history of foreign adventures: "Nothing ever happened. Even while it was
happening it wasn't happening. It didn't matter. It was of no interest."
Somewhere, a tree is always falling. -30-
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Ori Gersht: The Clearing is at the Photographer's Gallery, London WC2,
until February 5. Details: 020-7 831 1772 or www.photonet.org.uk.
--------------------------------------------------------------------------------------------
LINK: http://www.guardian.co.uk/arts/features/story/0,,1671151,00.html
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